Saturday, 27 August 2016
Last updated 21 hours ago
Jul 1 2014 | 8:26am ET
Hedge fund Pantera Capital Management went bargain-hunting at the U.S. Marshals Service bitcoin auction Friday, and came up empty-handed.
Pantera, which has become one of the most prominent bitcoin investors, said that the sale of the nearly 30,000 bitcoins—seized from online marketplace Silk Road—had the opposite of its expected effect, increasing demand for the virtual currency rather than sending its exchange price down.
“The U.S. government auction created a tremendous amount of new demand for bitcoin,” Pantera’s Dan Morehead told The New York Times. “Most of the people we spoke to were new entrants to the bitcoin market. None of our bids were hit. I think it went at quite a high price.”
The Marshalls said that 45 bidders had participated in the auction, with 63 bids received for the 10 3,000-bitcoin lots. The service had begun notifying winners, but has not identified them publicly.
Prior to the 12-hour auction, Pantera was widely seen as a favorite to come away with some of Silk Road’s bitcoins.
Pantera wasn’t the only hedge fund to bid. Rangeley Capital also made an offer, also below market price, and was also outbid, co-founder Chris DeMuth told the Times.
“It’s more about the process and the potential for the price than it is anything intrinsic to bitcoins,” DeMuth told the newspaper.